Liberty Endowment Policy?

[xrapidx]

I have one of those 5-yr Liberty Polices which I really regret being fooled into when I was younger.

It expires next year April, but I've slowly been watching it loose value over the past year - its now worth R69,000 - and I've put in R76,000, so we're sitting at a R7,000 loss.

Liberty estimate its value to be R106,000 in April next year, I worked out my payments till then, and would have put in R105,000... very disappointing return for 5-years.

With early withdrawal, I'll get R66,000 - should I consider doing this, and investing the money in a fixed deposit 11%/annum account - and then still put in the R2,200/month. I recon this might return a bit more than R1,000.

Anyone with experience in this sort of thing care to comment?

Here's whats happened since inception:

 

[xrapidx]

*day time bump*

 

[blunomore]

This is just downright depressing. I am considering stashing moola under my bed.

 

[xrapidx]

I know - its the last time I'm signing something like this, and they make it difficult for you to get your money back by charging you for early cancellation.

 

[stoke]

I like to deal with worst case scenario's in decisions like this:

If you do withdraw your money, that fund will suddenly skyrocket, you will look back and say .... aaaarg .... but at least you will have some money in pocket to re-invest.

If you leave your money there, the fund will idle away, getting worse and worse ... quite quickly becoming 40% of it's current value, you will say ... aaaaarg .... and then will withdraw your money only to find out that the account has been frozen by the reserve bank and ...

See where I'm going here?

 

[blunomore]

I know - its the last time I'm signing something like this, and they make it difficult for you to get your money back by charging you for early cancellation.

That is normal procedure, right (the early cancellation charges)?

If not, you could always knock on the insurance ombudsman's door.

 

[xrapidx]

I like to deal with worst case scenario's in decisions like this:

If you do withdraw your money, that fund will suddenly skyrocket, you will look back and say .... aaaarg .... but at least you will have some money in pocket to re-invest.

If you leave your money there, the fund will idle away, getting worse and worse ... quite quickly becoming 40% of it's current value, you will say ... aaaaarg .... and then will withdraw your money only to find out that the account has been frozen by the reserve bank and ...

See where I'm going here?

Looking at the current trend (over the past two years: see graph) and current market, I don't think its going to get much better in 12 months... even if it does, it probably won't beat 11% from the bank.

They do charge me a premium for guaranteed 3% return, but thats only R3,500 odd over 5-years.

That is normal procedure, right (the early cancellation charges)?

If not, you could always knock on the insurance ombudsman's door.

Yeh - its normal - I know there has been uproar about it, but nothing was ever done.

 

[stoke]

Looking at the current trend (over the past two years: see graph) and current market, I don't think its going to get much better in 12 months... ...

You have obviously made up your mind.

 

[xrapidx]

You have obviously made up your mind.

Nah - still considering it - weighing up options. Need to work out what I'll end up with if I put the money into a savings account, and then add R2,200 a month +interest.

This is what I currently have, but not sure if its correct, which would mean its not worth it.
With an initial lump sum of R66,000.00, if you save R2,200.00 each month, you will have R101,409.96 in 1 year(s).

 

[Sly21C]

So far I've lost about R10 000 through my old mutual unit trust account since early 2007, so I wouldn't kick myself too much if I were you, you are still young and you can make more money in years to come because time is on your side, while an old person ready to retire for example is in no such position. My advice is for you to cancel it and invest it in a fixed deposit account if you want to preserve your moola, otherwise if you are prepared to take risks and risk losing at least half your moola, then i'd suggest going the equity market route.....

 

[xrapidx]

My main concern is once its up - I can either reinvest it, or withdraw it, I can just leave it dormant until I'm happy with the price of the shares and then withdraw.

I have 450 OM shares, watched them go from about R12,000 to R2,700 today.

 

[blunomore]

I have 450 OM shares, watched them go from about R12,000 to R2,700 today.

Ouch !

 

[Dolby]

Yea - I see that's at about R5,40 per share now ...

3 Feb were at R7,60 ....

6 Jan were at R8,20 ....

15 Oct were at R10,44 ...

10 Sep were at R13,90 ...

11 Aug were at R14,88 ...

Doesn't look great :/

 

[xrapidx]

Speak of the devil, just got an email from Liberty about my annual premium increase - in this email they state the policy is worth R73,500 - I wonder where they get this number from, considering I keep close track on this sort of thing.

EDIT: Just saw this note:

Values quoted are current and not guaranteed.

 

[Ou grote]

Which one of their products did u invest in?
Is it an equity only one?

 

[xrapidx]

Its the Moderate Aggressive Endowment policy, it recovered a bit last week, its now up 3% from -5% on total value.

 

[2cute2shy]

Hi Guys

Intersting , so if I want to invest in a policy maybe 5 years / 10 years , who would you recommend and why ? The major players are old mutual , liberty , .....

Thanks

 

[blunomore]

Have you made a decision, xrapidx?

 

[xrapidx]

Its the Moderate Aggressive Endowment policy, it recovered a bit last week, its now up 3% from -5% on total value.

Just checked, at 0% now

Hi Guys

Intersting , so if I want to invest in a policy maybe 5 years / 10 years , who would you recommend and why ? The major players are old mutual , liberty , .....

Thanks

I'm the wrong person to ask

Have you made a decision, xrapidx?

I actually just had someone from ABSA come and see me about it (11:00-12:00) - so it was strange seeing this thread resurrected, he's going to do some sums, and and give me a few options, including keeping the policy for one more year.

Its one of the reasons I started this thread.

 

[Ou grote]

Hi Guys

Intersting , so if I want to invest in a policy maybe 5 years / 10 years , who would you recommend and why ? The major players are old mutual , liberty , .....

Thanks

There's plenty of them
http://www.fundsdata.co.za/Index/dom_manco_index.htm
take your pick.